Africa50 Investment Platform Gets a Thumbs Up: Unlocking the Continent’s Growth Potential

The presidents of Madagascar and Tanzania praise the crucial role of Africa50 in addressing the continent’s infrastructure challenges; Africa50 has mobilized over $1.1 billion in capital commitments and catalyzed an additional $4.4 billion in external financing in just seven years, Adesina.

Africa50, the investment platform established by African governments and the African Development Bank, is exceeding expectations and closing critical infrastructure financing gaps through innovative financing mechanisms and strategic partnerships, stakeholders heard on Thursday.

Speaking at the 2024 Africa50 annual General Shareholders’ Meeting held in Antananarivo, the President of Madagascar, Andry Rajoelina, and his Tanzanian counterpart, Samia Suluhu Hassan, acknowledged the central role of the organization in addressing the continent’s infrastructural and economic challenges , creating a foundation for sustainable development and prosperity.

President Rajoelina highlighted how Africa50 is driving transformative change by mobilizing funding for large-scale infrastructure projects in his country and across the continent.

He said that Madagascar, with its abundant natural and renewable resources, has become a model for energy transfer, and added that the country needs the support of international partners such as Africa50.

“In order to realize our vision, we need the support of international partners, and this is where the role of Africa50 members is crucial. We need to work together to secure funding for ambitious projects and enable Madagascar to transition to green, sustainable energy. This is a challenge for all of Africa,” the president said.

He said the continent has a unique opportunity to reassert itself as a global leader in the climate change challenge by supporting innovative and sustainable projects. “Africa is not the problem, Africa is the answer. »

President Samia Suluhu Hassan, in a speech read by the Minister of Finance and Planning, Mwigulu Lameck Nchemba Madelu, described clean cooking as an international agenda and business that must be treated as such.

According to the International Energy Agency, almost a billion people in Africa cook with polluting fuel, which has a direct impact on health and leads to half a million premature deaths every year. Still, the cost of solving the clean energy problem is relatively low.

The Tanzanian leader encouraged the use of clean cooking microfinance by providing low interest loans to households to purchase a clean cooking stove, allowing for a more manageable transition to clean cooking solutions… “It is essential to make clean cooking affordable, especially in low income areas low Governments can introduce effective incentives to producers and consumers to reduce the cost of cooking materials,” the Tanzanian president said.

The meeting brought together global leaders, policy makers, investors, and infrastructure experts to strategize and collaborate on the steps needed to stimulate investment in a sustainable future for Africa.

“The fact that Africa50 is exceeding expectations and bridging the funding gap by addressing today’s challenges through innovative funding mechanisms and strategic partnerships is good news for Africa and the world,” said the President and Chairman of Boards African Development Bank Group Directors, Dr. Akinwunmi Adesina said in a keynote speech at the event.

Adesina, who is also the Chairman of the Africa50 Board of Directors, told the meeting that Africa50 has mobilized over $1.1 billion in capital commitments and catalyzed an additional $4.4 billion in external funding In just seven years of operation. “Its portfolio includes 25 transformative projects in 28 countries, with a total value of over $8 billion across the energy, transport, digital infrastructure, education and healthcare sectors.”

In December 2023, the 50 Africa Infrastructure Acceleration Fund (IAF) secured $222.5 million at the close from mainly African investors, a first for the continent.

Africa50’s vision for Africa’s future

With Africa’s population expected to reach 2.5 billion by 2050 and a booming consumer market, the continent will be one of the most popular investment destinations in the world, Adesina told the meeting, “We are determined to continue deploying capital, overcoming obstacles to invest, and deliver transformative projects.”

In his comments, the CEO of Africa50, Alain Ebobissé, said that over the past year, the organization has invested in key infrastructure projects, guided by the need for speed and scale in operating for the continent. “Investors manage more than $2.3 trillion in Africa. Africa50 aims to mobilize and catalyze some of this capital to finance infrastructure in Africa,” he said.

He highlighted the Africa Infrastructure Acceleration Fund50 as an achievement which is the first of its kind in Africa.

“This fund is a significant step forward in mobilizing African capital to bridge Africa’s infrastructure gap,” added Ebobissé.

In 2023, Africa50 demonstrated its potential by facilitating significant foreign direct investment in clean energy, even as global FDI fell by 3%.

With over 60% of the world’s solar energy potential, Africa has a golden opportunity to follow a low carbon energy path, expand its electricity supply, and decarbonize its economies.

Madagascar, the world’s fourth largest island nation, was cited as an example of how infrastructure development can drive economic growth.

The total commitments of the African Development Bank in Madagascar are more than 1 billion dollars, with transport, energy and agriculture accounting for more than 97% of the portfolio.

Sahofika’s flagship project, the benchmark for green baseload in the country’s energy mix, will reduce the share of thermal power generation to less than 10%, cutting the country’s generation costs by more than 30%.

Transport infrastructure

The African Development Bank remains committed to supporting Madagascar in its efforts to improve connectivity and promote trade across the continent through sustainable transport infrastructure projects, Adesina said.

“Thanks to the corridor development and trade facilitation project, 165 km of roads, including the Analamisampy-Manja section, along with four bridges on the RN9, have been built, reducing travel time from 48 hours to just 5 hour,” said Adesina.

“Transport infrastructure improvements are also revolutionizing trade and travel, reducing travel times along key corridors from 48 hours to just five hours,” he added.